U.S. District Judge Charles Breyer said at the brief hearing that the two parties have been making significant progress.

The "parties ... have reported that in the month since we last met they have made substantial progress in intensive daily efforts to finalize the agreement, and most importantly are on track to meet the court's deadline," Breyer said.

That deadline is June 21st.

But there could be a possible roadblock for this agreement. Bloomberg reports that Volkswagen is arguing the fines being sought by the U.S. Government for emission cheating are excessive. The filing made on Tuesday said they were presenting this because the government probe is still ongoing.